EECS500 Fall 2011 Department Seminar

Mingguo Hong
Electric Grid Operation Under the Market Economic Structure
Midwest ISO
White Bldg., Room 411
11:30am - 12:30pm


For nearly a century, the electrical energy industry in the United States operated under vertically integrated structures where electricity generation, transmission and distribution are owned and managed by monopolistic local utility companies. Electricity prices were regulated by state utility commissions. Since the 1990’s, Federal Energy Regulatory Commission (FERC) issued a series of landmark regulations that ordered deregulation of the industry, i.e., separation of the electrical utilities into generation, transmission and distribution companies and establishing the wholesale electricity markets.  These orders led to the formulation of Regional Transmission Organizations (RTOs). As the grid operator, RTOs ensure the secure delivery of electricity to end users. As the market administrator, RTOs manage the daily clearing of the wholesale electricity market where energy trading takes place among electricity generation companies, distribution companies and energy brokers. Electricity cannot be store in bulk quantity. They must be consumed at the very instant they are generated. This unique characteristic of electricity as a market commodity makes the market design to be both challenging and fascinating. This talk will discuss some of essential design concepts such as the two market settlement system, the Locational Marginal Prices (LMP) for energy clearing, and the ancillary services as market products. The talk will also discuss the technological challenges in market implementation that are overcome with the latest advancement in Operations Research algorithms and Information Technology.



Mingguo Hong is a principal market engineer at the Midwest ISO, responsible for market design, implementation and support for the Midwest Energy Markets.


His responsibilities include real-time operations support, market applications testing and market applications design. He also teaches at the Electrical and Computer Engineering department of IUPUI as an adjunct faculty member.


Prior to joining the Midwest ISO, he worked as a power systems engineer for ALSTOM T&D, Inc. and taught mathematics at Valley Forge Military College in Valley Forge, PA. He joined the Midwest ISO in 2006 as an engineer in the Market Engineering department.


Mr. Hong received his Bachelor of Science degree in electrical engineering from Tsinghua University of China in 1991, a Master of Science degree in mathematics from the University of Minnesota in 1993, and Ph.D. in electrical engineering from the University of Washington.